🪓 Yikes, BlockFi forgot to comply!

BlockFi paid the SEC 9 figures and US & Russia are competing again!


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Gooood morning, Rainmakers! ☀️

As always, I have two captivating topics for you to dive into:

1️⃣  🪓 Yikes, BlockFi forgot to comply!: BlockFi settled 9 figures with the SEC over failing to comply!

2️⃣  🏎 The digital 'arms' race: The world superpowers, US and Russia, are back at it again to win the crypto war!

Without further ado, it's time to…

Get liquid 💧

🪓 Yikes, BlockFi forgot to comply

For those of you who don't know, BlockFi is essentially a checking account for your crypto.

Just like how your bank gives you interest on your savings, so does BlockFi, but with your crypto holdings.

The difference is BlockFi was offering up to 9.5% APY; whereas, an average traditional bank offers closer to .2% or less!

I know, right?! It's insane.

BlockFi claims to make money off the spread of borrowers and lenders - meaning if someone earns 9.5% on their crypto that means the borrower supposedly pays BlockFi more than 9.5%.

This definitely had the SEC scratching their heads.

Less than a year ago, BlockFi was feeling pretty good about themselves after they raised $350M via their Series D at a $3B valuation!

Until the SEC came knocking on their doorstep...

BlockFi knew that the SEC wasn't there to sell any girl scout cookies, but was there to investigate.

Unfortunately, but also fortunately at the same time, they agreed to settle $100M in charges regarding failing to register its retail cryptocurrency lending product.

Why is it also a fortunate thing, you ask?

Well, for starters, the SEC could have ordered a cease and desist causing BlockFi to shut down all operations indefinitely.

However, SEC Chairman, Gary Gensler, had other ideas:

On the surface, it looks like this is a bad thing, but it is quite the opposite as it creates a roadmap for other firms attempting to do something similar.

The SEC is also reportedly investigating the lending practices of Celsius, Gemini, and Voyager Digital Ltd, so now these firms will know what they can and can't do.

Remember friends, if you don't comply... you 'die.'

The ones who follow the securities laws will always win in the end.

🏎 The digital 'arms' race

Ohhhh boy, Rainmakers, we have a global showdown that is heating up!

This feels like the mid 20th century again (I obviously have a very good memory of this time period 😂) with the superpower nations going at it.

Except, this time the race is about digital prominence.

In the last few weeks, this is what Russia and the US have announced:

Are you not entertained?!

These two superpower nations have been going at one another for centuries now, whether it was the space race or the arms race, there's always been a competition.

It's no coincidence that Russia and the US are competing once again.

Although this may be more of a 'posturing' move, I personally love to see the US attempting to move towards some sort of crypto regulation. 

We are in desperate need of regulatory clarity, as there are an innumerable amount of companies rug pulling and operating as illegal securities. 

The executive order is expected to assign specific roles to a broad spectrum of federal departments and agencies in developing a comprehensive U.S. digital asset strategy.

One of the core objectives of this executive order is to remain competitive amid the exploding growth of digital assets worldwide.

I'm intrigued to see what happens, as there have been talks about declaring Ethereum as a security. If that occurs - I'd imagine 99% of all cryptos will be deemed illegal securities too.

Don't worry, that is a very doubtful outcome!

Regardless of the decision, one thing for certain is we are on the brink of regulatory clarity!

💦 What else is Drippin’

  1. NYSE files a trademark application for trading NFTs: Even the NYSE is feeling some FOMO!
  2. A new security token from a Brazilian Investment Bank: BTG Pactual is getting in on the security token game!
  3. Snoop Dogg Plans to Turn Death Row Records Into the First NFT Music Label: Snoop Dogg knows a thing or two about NFTs.

Thanks for tuning in! Keep an eye out each Monday for the next security token adventure 🧗‍♀️

Disclosures:

• No money or other consideration is being solicited, and if sent in response, will not be accepted; 

• No offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement is filed and only through the platform of an intermediary (funding portal or broker-dealer); and 

• A person’s indication of interest includes no obligation or commitment of any kind

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